A beef with her argument

In her Dec. 27 column favoring use of the "chained CPI" (consumer price index) to determine tax-bracket adjustments and Social Security cost-of-living increases, Ruth Marcus contradicts her own position. First she says that, if beef becomes so expensive that we stop eating it and eat cheaper chicken instead, the chained CPI will no longer reflect the cost of beef but will then reflect the cost of chicken. Then she says that the purchasing power of Social Security benefits will remain the same. If the purchasing power doesn't increase enough to keep buying beef, then it hasn't remained the same!

If the increased demand for chicken causes chicken prices to go up, maybe we won't be able to afford chicken, either. We'll be eating dog food. The chained CPI will then be adjusted to reflect the cost of dog food rather than chicken. Will Ruth Marcus still insist that the purchasing power is enough to buy beef?

Heck, if food becomes so expensive that the non-wealthy can't afford to buy any of it and have to dumpster-dive for discarded, half-eaten food, the chained CPI can then completely drop the cost of food. If you believe Marcus, however, it will still have the same purchasing power. This defense of the chained CPI is totally ridiculous.

The real argument in favor of using it, as Marcus states elsewhere in her article, is that it will increase taxes and reduce Social Security payments in the future, thereby resolving some of the government's financial problem. However, that will backfire. We will all have less money to spend. That will reduce business revenues and employment in the private sector, which will in turn reduce government tax receipts and increase government assistance to the unemployed. Using the chained CPI won't achieve the goal of reducing the deficit, but it may make it worse because it will actually reduce our purchasing power, despite what Marcus says.